A Study of Financial Deepening, Capital Accumulation and Macroeconomic Variables in Nigeria

Abstract: Low capital accumulation or savings due to financial shallowness instead of financial deepening is a worrisome situation that needs to be addressed. This is because low capital accumulation will lead to low investment and this would hinder the achievement of one of the Sustainable Development Goals of economic growth and full employment. Data, which were relevant to variables of study like financial deepening and total savings (which was used to capture capital accumulation), and spanning 48 years from 1970 to 2018 were gathered from secondary sources and analyzed using the ARDL model. The result proved that savings accumulation has a long-term positive and significant impact on financial deepening. The paper recommends amongst others that banking habits should be encouraged to every Nigerian so as to increase total savings and hence, capital accumulation.